2050 may be far away, yet it’s not farfetched to predict that the world economy will be led by Indonesia, China, India, and Japan, writes ANANYA BORGOHAIN
The complexities of global economy have understandably multiplied in the last four or five decades, more so with the convergence of multiple players. Numerous countries from both the developing and the developed world have intertwined, rendering them dependent on each other to sustain the world economy. Although gradually, but a major paradigm shift has come to be seen with times.
For instance, the UK’s exit from the European Union resulted in the sterling hitting a low against the dollar, its lowest in over 30 years. Not only did the value of the pound fall, but both European and US equity markets incurred heavy losses. As these major players of world economy seem to be dwindling with fresh wounds, Asian countries are emerging as key stakeholders in the global economy.
If Harinder S Kohli — Founding Director and President of Centennial Group — is to be believed, China, India, and the US would be the three largest economies in 2050 — accounting among them half of the total world GDP ($338 trillion) — and in that order. Speaking at the launch of his book, The World In 2050 (Oxford University Press), Kohli emphasised the burgeoning growth of developing economies and stated that the global economy will gravitate towards Asia and will be led by Indonesia, Japan, China, and India in the future.
An anthology of critical perspectives formed by figures of authority, the book entails essays written by 26 authors from 12 countries and five continents; but all address one concern — the future of world economy.
The authors include Michel Camdessus (former Managing Director of IMF), Pascal lamy (served for two consecutive terms as Director-General of the World Trade Organization), Alejandro Toledo (democratically elected President of Peru in 2001), Claudio loser (Founding Director and Chief Executive Officer of Centennial latin America), and Horst Kohler (former President of Germany). Two Indians who are a part of the project include RA Mashelkar, National Research Professor, and presently also the President of Global Research Alliance, and Montek Singh Ahluwalia, former Deputy Chairman of the Planning Commission for India.
They explore crucial areas such as climate change, urbanisation, international trade, food security, living standards, and so on. While one may believe that 2050 is far away and any claim made now will be overambitious, outgoing RBI Governor Raghuram Rajan mentioned upon the book’s launch in Mumbai that it is relevant to anticipate these issues today.
The book highlights the responsibility the world economies should shoulder while elevating the standards of living, more responsibly post the global economic threat we faced in 2007. It urges that for a flourishing economic order, the big developing economies, more particularly led by East Asia and India, should come together to reinforce their power over the rest of the world.
It’s pertinent to estimate and prepare for an economic and a social standpoint of the world three decades from now, locating the multifarious, intergenerational issues that influence politics, society, and history. At the launch, urbanisation, technology, climate change, the phenomenal rise of the middle class population were aspects that were considered to be pertinent in the way global trade operates. For this, uncompromised attention should be paid to eliminating air pollution, sanitising drinking water, public hygiene, recycling, and much more. After all, the biggest stumbling block, particularly for the Indian economy, still is infrastructure and that must be engaged with without any compromise and for permanent sustainability.
Interestingly, it is also being assumed that the domestic consumer will be prioritised soon in the world trade negotiations. The consumer will have the upper hand instead of the domestic producer. This could be much interesting and a highly effective module for India, (which already accounts for a sixth of the world’s population), with its emerging and increasingly powerful middle class population.
In the same way, Prime Minister Narendra Modi’s Make in India campaign, if carried out efficiently, could be a key component in elevating India further on the world map.
Another major concern of the present times — increasing crude oil prices — has been addressed in the book. Kohli believes that the future will see a decline in the interest in fossil fuel, which will result in a drop in high energy prices. This is a tall claim, but Kohli cites the very significant climate change action programmes announced in Paris last year to consolidate his arguments. He believes that the resolution to reduce carbon emission will help in nurturing a healthy lifestyle for people as well.
The developing countries are expected to grow twice as fast as the super economies. Reportedly, the per capita income of these countries is expected to increase from $11,000 to $33,000 soon. What remains to be seen is how India manages to have a performance-oriented, uncorrupted Government and public institutions, without which any kind of progress will be a distant dream.
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